Is brand Bangalore being washed away by flood?

Just a few days of rain changed everything, exposing the crumbling infrastructure of crammed Bangalore and washing away the tall claims of authorities.

Roads disappeared under muddy flood water and motorboats came roaring rescuing people from their own homes. Fish were spotted on highways and people were seen swimming in their living rooms in posh colonies of Bangalore -- the capital city of Karnataka and IT hub of India. Their luxury cars, from BMWs and Range Rovers to Bentleys, were left behind, half-submerged. The stark visuals of flooding inundated social media too. 

Life came to a standstill in Bangalore’s key Outer Ring Road area, which houses more than 700 companies, including offices of big ones like Microsoft, Intel, Goldman Sachs and Morgan Stanley. Many of these companies have had to allow work from home or pass on important work to locations outside of the city. While companies usually have business continuity plans involving such steps, they have still paid a heavy price.

The Outer Ring Road Companies Associations has reportedly claimed that the flood caused a loss of Rs 225 crore to the IT and banking companies it represents on the 30th of August alone. In a September 1st letter to Chief Minister Basavaraj Bommai, the industry body asked the government to come up with short-term and medium-term plans to address the issue. Stating that concerns about Bengaluru’s future growth were being raised across the world, the letter warned that companies may leave if the infrastructure issues were not addressed.

IT and IT-enabled services remain one of the top services exports from India. Close to 50 per cent of the total services exports comprise IT exports. India's services exports set a new record of $254.4 billion in FY22, beating the previous high of $213.2 billion in FY20.

According to the Karnataka economic survey, the state contributed an estimated 38 per cent to India's FY22 software exports, which were estimated to be worth $170 billion.

According to a recent report by Inc42, Bangalore has clinched the title of India's 'top start-up hub'. It added that within India, Karnataka topped the list of states in terms of start-up ecosystem development with $62 billion in funding. Meanwhile, Delhi-NCR attracted $39 billion and Maharashtra 20.

The stakes are high when it comes to brand Bengaluru’s future. India's start-up success story has been touted across international forums by the government, which is also counting on the ecosystem to generate much-needed high-quality jobs. India also has an ambitious services export target of $1 trillion by 2030. The continued growth of the IT industry, and by extension that of Bengaluru, will be a necessary condition for achieving this goal.

But now, there are fears that the city's technology capital image could be in deep water. And, the brand image has indeed been dented.

Mohandas Pai, Chairman of Manipal Global Education Services and Advisor at Manipal Education & Medical Group, says brand Bengaluru is hurt by flooding and bad governance. Authorities taking the city’s IT ecosystem for granted. Illegal constructions blocking waterways needed to stop flooding. CM should set up a high-level panel to fix issues. 

But, Bangalore can still salvage the situation. A senior IT services veteran based in Bengaluru told Business Standard that when he spoke to five large Fortune 500 firms, none said that the recent flood would make them move out of the state or the city. The National Association of Software and Service Companies also appeared to be committed to staying put.

Last week, a Nasscom-led consortium of software companies met Karnataka IT and BT Minister C N Aswathanarayana to discuss the way forward. State officials have agreed to have IT sector participation in governance mechanisms planned for Bengaluru’s tech corridors. The officials will also hold a meeting with the industry to discuss plans once every fortnight.

Advertising guru Prahlad Kakkar said that Bengaluru's image as a cosmopolitan city had taken a bit of a beating. But, he added that this was a problem that also plagued other cities in India, including Mumbai, where flooding is routine. Kakkar concluded that the underlying causes would have to be addressed seriously if Brand Bengaluru was to emerge again as a vibrant city. What is clear is that if the authorities have the will, the city can definitely brave the deluge and emerge stronger than before.